Honeywell International awarded $52.5M for TIGER Program engine revitalization, a sole-source contract

Contract Overview

Contract Amount: $52,470,575 ($52.5M)

Contractor: Honeywell International Inc.

Awarding Agency: Department of Defense

Start Date: 2022-09-20

End Date: 2025-08-30

Contract Duration: 1,075 days

Daily Burn Rate: $48.8K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: TOTAL INTEGRATED ENGINE REVITALIZATION (TIGER) PROGRAM. DELIVERY ORDER YEAR 2, DELIVERY ORDER NUMBER 7 HARDWARE

Place of Performance

Location: PHOENIX, MARICOPA County, ARIZONA, 85034

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $52.5 million to HONEYWELL INTERNATIONAL INC. for work described as: TOTAL INTEGRATED ENGINE REVITALIZATION (TIGER) PROGRAM. DELIVERY ORDER YEAR 2, DELIVERY ORDER NUMBER 7 HARDWARE Key points: 1. Contract awarded to a single vendor suggests limited market exploration and potential for higher pricing. 2. The firm-fixed-price structure shifts cost risk to the contractor, but the lack of competition is a concern. 3. Delivery order for hardware under the TIGER program indicates ongoing sustainment needs for military vehicles. 4. The contract duration of nearly three years suggests a significant, long-term requirement. 5. Performance context is limited without details on specific engine types or quantities. 6. Sector positioning within military vehicle component manufacturing is noted, with potential for follow-on work.

Value Assessment

Rating: fair

Benchmarking the value of this delivery order is challenging due to its sole-source nature and specific hardware focus. Without competitive bids, it's difficult to ascertain if the $52.5 million represents optimal value for money. The firm-fixed-price contract type is generally favorable for cost control, but the absence of competition limits the ability to compare pricing against market rates or alternative suppliers. Further analysis would require understanding the specific components and their market prices.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning Honeywell International Inc. was the only vendor considered. This approach bypasses the standard competitive bidding process, which typically involves multiple vendors submitting proposals. While sole-source awards can be justified for unique capabilities or urgent needs, they limit price discovery and can potentially lead to higher costs for the government compared to a fully competed contract. The lack of competition here means taxpayers do not benefit from the cost savings that can arise from a competitive environment.

Taxpayer Impact: The sole-source nature of this award means taxpayers may not be receiving the best possible price due to the absence of competitive pressure. This limits opportunities for cost savings that could be realized through a more open bidding process.

Public Impact

The primary beneficiaries are the Department of the Army and potentially military personnel relying on operational armored vehicles. Services delivered include hardware for engine revitalization, crucial for maintaining the readiness of military equipment. Geographic impact is primarily within the operational theaters where these vehicles are deployed, and potentially at maintenance facilities in Arizona where the contractor is based. Workforce implications include support for skilled labor at Honeywell involved in manufacturing and logistics for these specialized engine components.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated pricing.
Sole-source award limits transparency in pricing and vendor selection.
Dependence on a single supplier for critical engine components poses a supply chain risk.

Positive Signals

Firm-fixed-price contract shifts cost overrun risk to the contractor.
Contract is for hardware, indicating a tangible product delivery.
Long-term contract duration suggests a stable, ongoing requirement.

Sector Analysis

This contract falls within the defense industrial base, specifically the manufacturing of military vehicle components. The market for specialized engine revitalization hardware is likely dominated by a few key original equipment manufacturers (OEMs) like Honeywell, given the proprietary nature of military vehicle systems. Spending in this sub-sector is driven by military readiness requirements and the lifecycle management of aging vehicle fleets. Comparable spending benchmarks would typically involve other sustainment contracts for similar vehicle platforms or engine overhaul services.

Small Business Impact

This contract does not appear to involve a small business set-aside, as it was awarded to Honeywell International Inc., a large corporation. There is no explicit information regarding subcontracting plans for small businesses within this specific delivery order. The absence of a set-aside or clear subcontracting goals means that opportunities for small businesses to participate in this particular contract are likely limited, potentially impacting the small business ecosystem within this defense manufacturing niche.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army's contracting and program management offices. Accountability measures are embedded in the firm-fixed-price contract terms, requiring delivery of specified hardware. Transparency is limited due to the sole-source nature of the award. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

TOTAL INTEGRATED ENGINE REVITALIZATION (TIGER) PROGRAM
Department of the Army Sustainment Contracts
Military Vehicle Component Manufacturing
Defense Logistics Agency (DLA) Hardware Procurement

Risk Flags

Sole-source award
Lack of competitive bidding
Potential for non-competitive pricing
Supply chain dependency on a single vendor

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $52.5 million to HONEYWELL INTERNATIONAL INC.. TOTAL INTEGRATED ENGINE REVITALIZATION (TIGER) PROGRAM. DELIVERY ORDER YEAR 2, DELIVERY ORDER NUMBER 7 HARDWARE

Who is the contractor on this award?

The obligated recipient is HONEYWELL INTERNATIONAL INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $52.5 million.

What is the period of performance?

Start: 2022-09-20. End: 2025-08-30.

What is the specific nature of the hardware being procured for the TIGER Program, and what is its criticality to military operations?

The provided data indicates the hardware is for engine revitalization under the TIGER Program. While the exact components are not specified, engine revitalization hardware is critical for maintaining the operational readiness and performance of military armored vehicles. These components could include critical engine parts, overhaul kits, or specialized tools necessary for repairing and upgrading existing engines. The criticality stems from ensuring that armored vehicles can perform their intended missions effectively in various operational environments. Without these parts, the lifespan and effectiveness of the vehicle fleet would be significantly compromised, impacting military readiness.

How does the $52.5 million award compare to historical spending on similar engine revitalization efforts for this vehicle type?

Comparing this $52.5 million delivery order to historical spending on similar engine revitalization efforts is challenging without more specific data on the vehicle platform and the scope of work. However, as a sole-source award, it is inherently difficult to benchmark against competitive pricing. Historical data from other, potentially competed, contracts for engine overhauls or component replacements for comparable military vehicles could provide a reference point. If past competitive awards for similar scope were significantly lower, it would raise concerns about the value received in this instance. Conversely, if historical sole-source awards for this specific platform have been in a similar range, it might suggest a consistent, albeit potentially non-optimal, pricing structure.

What are the potential risks associated with awarding this contract solely to Honeywell International Inc. for engine revitalization hardware?

The primary risk associated with this sole-source award is the potential for inflated pricing due to the lack of competitive pressure. Honeywell, as the sole provider, may not have the same incentive to offer the most cost-effective solution as they would in a competitive environment. Another significant risk is supply chain vulnerability; reliance on a single supplier for critical engine components can lead to delays or disruptions if Honeywell faces production issues, labor strikes, or other unforeseen problems. Furthermore, the absence of competition limits the government's ability to explore alternative technologies or more innovative solutions that other manufacturers might offer. This can also stifle innovation within the broader defense industrial base.

What is Honeywell International Inc.'s track record with the Department of Defense, particularly concerning engine-related contracts?

Honeywell International Inc. has a substantial and long-standing track record as a major defense contractor, with extensive experience in aerospace and defense systems, including engines and related components. The company is a significant supplier to the Department of Defense across various platforms. While specific details on their performance for the TIGER Program's engine revitalization hardware are not provided in this data, Honeywell's general history suggests they possess the technical capability and manufacturing capacity to fulfill such requirements. However, like any large contractor, past performance reviews and contract histories would need to be examined to assess their specific reliability, quality, and pricing practices on similar defense contracts.

What are the implications of the firm-fixed-price (FFP) contract type for this sole-source award?

The firm-fixed-price (FFP) contract type is generally advantageous for the government as it places the risk of cost overruns on the contractor, Honeywell International Inc. This means that the $52.5 million ceiling is the maximum the government expects to pay, regardless of Honeywell's actual costs. For a sole-source award, FFP provides a degree of cost certainty for the government. However, the benefit of FFP is somewhat diminished when there is no competition to establish a fair and reasonable baseline price. While the government is protected from cost increases, the initial price might be higher than it would be in a competitive FFP scenario. The focus then shifts to ensuring the initial price negotiated was indeed fair and reasonable.

Industry Classification

NAICS: Manufacturing › Other Transportation Equipment Manufacturing › Military Armored Vehicle, Tank, and Tank Component Manufacturing

Product/Service Code: ENGINES AND TURBINES AND COMPONENT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Resideo Technologies, Inc.

Address: 111 S 34TH ST, PHOENIX, AZ, 85034

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $52,470,575

Exercised Options: $52,470,575

Current Obligation: $52,470,575

Subaward Activity

Number of Subawards: 173

Total Subaward Amount: $26,203,862

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W56HZV20D0062

IDV Type: IDC

Timeline